Should government own profitable businesses?
09 Oct '13 21:01The UK Government are selling the Royal Mail.
The IPO is 7 times over subscribed. This would indicate probable long term profitability in the company.
It would also indicate it has been undervalued by the government. Therefore the taxpayer is not getting a fair price for its asset.
If it will be profitable in the long term, why is the government selling this asset?
At the moment everyone owns this national institution and shares in its successes. But when it is sold only those rich enough to buy shares will benefit from the profits.
It strikes me that after privatisation, the public can only lose (service level and cost) and the shareholders only win (as it is largely a monopoly).
(ps I have applied for shares, not because I agree with the sale but because I'll make a few hundred quid for doing nothing.... which I feel is a bit immoral)
The IPO is 7 times over subscribed. This would indicate probable long term profitability in the company.
It would also indicate it has been undervalued by the government. Therefore the taxpayer is not getting a fair price for its asset.
If it will be profitable in the long term, why is the government selling this asset?
At the moment everyone owns this national institution and shares in its successes. But when it is sold only those rich enough to buy shares will benefit from the profits.
It strikes me that after privatisation, the public can only lose (service level and cost) and the shareholders only win (as it is largely a monopoly).
(ps I have applied for shares, not because I agree with the sale but because I'll make a few hundred quid for doing nothing.... which I feel is a bit immoral)
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